Cherry AG

Investor Presentation • Feb 28, 2025

CHERRY\$

Q4/FY 2024 PRELIMINARY FINANCIAL RESULTS

MUNICH, 27 FEBRUARY 2025

LEGAL DISCLAIMER

This presentation contains forward-looking statements.
These statements are based on the current views, expectations and assumptions of the management of Cherry SE and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those described herein due to factors affecting Cherry SE such as, among other things, changes in the general economic and competitive environment, capital market risks, currency exchange rate fluctuations and competition from other companies, and changes in international and national laws and regulations, in particular with respect to tax laws and regulations. Cherry SE does not assume any obligation to update any forwardlooking statements.
The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed, for any purpose, on the information contained herein or its accuracy or completeness. The information in this presentation is subject to change.

MARKET \& INDUSTRY DATA

This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to the Company's industry, the Company's business and the market for the Company's products and its future growth. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the Company's future performance and the future performance of the market for its products are necessarily subject to a high degree of uncertainty and risk.

GENERAL REMARK

Figures may not add up due to rounding.

OVERVIEW
CEO OLIVER KALTNER

IN Q4 WE MISSED OUR OWN EXPECTATIONS

Volume switches: Increasing pressure on competitiveness

Americas below expectations

Peripherals pricing prioritized over sell-in quotas

Lackluster corporates and consumer spending

OH\&S with $>30 \%$ FY growth as budgeted

FY sales at EUR110m, below EUR120m forecast

FY adj. EBITDA margin - $2 \%$ vs. c. $3 \%$ forecast

Highlight: EUR 7.8m FCF in the $4^{\text {th }}$ quarter

NEW ORGANIZATIONAL STRUCTURE

SIGNIFICANT CHANGES SINCE 1 JANUARY 2025

Complete reorganization within Europe

Centralized product management, sales, and marketing fur Components and Peripherals

Components integrated into COO led product management and development unit

European distribution network realigned with "Distribution \& Fulfillment" strategy

DH\&S to remain separate

CHERRY Peripherals the one-stop-shop for marketing \& sales of Office, Gaming, Hygiene, and Security finished goods

From 1 Feb Alex Hecker (ex Sonos, ex MS, ex Sony) in charge of Global Sales and Marketing Peripherals

New Partner Program

SPECIFIC ACTION POINTS

New contracts negotiated with partners, valid from 2025

Dry up grey market in DACH region

Stock relations to support sell-through and sell-out

Development of "product allocation by partner" model

50\% higher street prices on affected products

FROM A HIGH-COST SWITCH PRODUCER TO AN INTEGRATED PERIPHERALS PLAYER

2024

Volume driven

Switches at the core

Margin destroying distribution agreements

Price erosion on grey market

Too many legal entities

Restructuring years

Switch assembly to China

New margin and price model for Peripherals

SWCloud business models in DH\&S

Integration and streamlining of group structure

Margin driven

Switches integrated into product management

New partner program effective January 25

Combined sales and marketing for Office, Gaming, Hygiene, and Security Peripherals

Q4/FY 2024 FINANCIALS

EVP FINANCE \& IT VOLKER CHRIST

Q4 REVENUE HIT TRANSLATED INTO NEGATIVE ADJ. EBITDA MARGIN

FY REVENUE

(IN EUR M)

• FY 24 revenue at EUR 110.0m, $13 \%$ below 23 's EUR 126.5 m
• Q4 24 revenue at EUR 25.8 m , $32 \%$ below 23 's EUR 37.9 m
• Resulting Q4 EUR 6.4m gross profit hit led to impaired fixed cost coverage
• FY 24 adj. EBITDA at EUR -2.2m
• Q4 24 adj. EBITDA at EUR -1.5m, up qoq, down yoy.
  Q1 Q2 Q3 Q4

FY ADJ. EBITDA

(IN EUR M; MGN. IN \%)

Q4 REVENUE AND ADJ. EBITDA SPLIT

REVENUE SPLIT (IN EUR M)

2024 SHOWED GOOD OPEX CONTROL

R\&D, SALES \& MARKETING, ADMIN COSTS (in EUR m)

STRONG Q4 TWC REDUCTION LIFTED FREE CASH FLOW BY EUR 5M YOY

TRADE WORKING CAPITAL* (in EUR m)

FREE CASH FLOW (in EUR m)

Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24

DIVISIONAL UPDATE

COO DR. UDO STRELLER

COMPONENTS: TOUGH ENVIRONMENT

Disappointing 2024

• Sales below own expectations
• Adj. EBITDA only break-even

Chinese Assembly since H2 24

• MX2 assembly for partner products shifted to China
• Consequent reduction of unit costs
• Adjusted size of organization

Competitive Environment

• Switch volume business dominated by China
• Ever-shorter product cycles

Product Pipeline I

• MX3 timely in preparation and to be launched mid 2025
• Successful re-entry into community switch field with MX Purple, next MX Northern Light \& MX Blossom

End Markets

• Notebook end market still, lackluster, thus limiting ULP momentum, leading to order push-outs

Product Pipeline II

• Additionally, there are new Cherry analog switches in development
• ... and to be launched in the course of 2025, too

PERIPHERALS TURNAROUND ON TRACK

Roll-out: New Partner Model

• Q4 increase in street prices
• New integrated Sales and Marketing approach
• Ongoing SKU reduction

E-Commerce

• Dec 24: strong sell-out
• Strong growth in Gaming mice
• 2024: Amazon up > 20\% yay
• Certified by Alibaba

Retail Activation

• CHERRY displays in 170 MediaMarkt outlets since 1st February
• MediaMarkt online listing for CHERRY ATRFY

CHERRY Americas

• Establishment of adequate partner network should finally reactivate US momentum
• With > 40\% yaygrowth in Jan, Office traction starts to materialize

Portfolio Optimization

• Ongoing complexity reduction of product portfolio
• SKU reduction by $~ 50 \%$ targeted

CHERRY APAC

• 2024 targets achieved
• Distribution diversified
• New Shanghai office
• Beensoek to be integrated into AI mice

DH\&S - GROWTH DRIVER AND STABLE PILLAR

Strong Growth in 2024

• $>+30 \%$ yoy
• Strong momentum in terminals
• Pleasing development in hygiene and security

Terminal Management System

• Remote management and administration of card terminals
• 2025e: scaling TMS sales via partners

E-health Terminals

• $80 \%$ market share in new terminals sales
• 0125 rather back end loaded due to strong Nov \& Dec 24

SmartLink

• Provider certification now expected for end of 01
• Production start and transactional sales expected for H1

Hygiene Keyboards

• Establishment of adequate partner network should finally reactivate US momentum
• Strong hygiene requirements in Europe and the US

TI-Messenger

• Provider certification targeted for 01
• Launch in model region Würzburg

OUTLOOK

CEO OLIVER KALTNER

GERMANY CLEARLY THE GROWTH LAGGARD

GERMAN REAL GDP GROWTH 2013 - 2024 (in \%)

201320142015201620172018201920202021202220232024

GDP GROWTH ASSUMPTIONS 2025e (in \%)*

• Source: Destatis, 15 January 2025

HIGHER UNCERTAINTY LEADS TO LOWER CONSUMER CONFIDENCE IN GERMANY

NEWS COVERAGE ABOUT POLICY-RELATED ECONOMIC UNCERTAINTY (Jan 2001 = 100)
1.000
800
600
400
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018201920202021202220232024

• Europe
  -Germany

CONSUMER CONFIDENCE GERMANY NOT RECOVERING (Mar 24 - Feb 25))

PRIORITIES 2025 BY BUSINESS UNIT

PERIPHERALS

DH\&S

• Strong benefit from connecting new healthcare professionals to TI
• Beginning refresh cycle for existing users in the German healthcare system
• In H2 complete portfolio covered and positioned more broadly

GAMING AND OFFICE LAUNCHES AT CES

EUR 3.5M COST CUTTING PROGRAM ON TRACK

C. EUR 3.5 M SAVED FROM SEP TO DEC 2024

MARKETING

SERVICES

IT PROJECTS

FY 2025 FORECAST DRIVERS

IR CONTACT

NICOLE SCHILLINGER SVP INVESTOR RELATIONS

EMAIL: IR@CHERRY.DE PHONE: +49 96432061848
WEB: HTTPS://IR.CHERRY.DE